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Can we apply for consumer proposals as joint or separately?

We own an incorporated company and are the only shareholders. He’s president, she’s an officer of the company. Both have high personal debt. Can we apply for consumer proposals as joint or separately? Is the business affected?

Posted from: Manitoba

One Response to “Can we apply for consumer proposals as joint or separately?”

Jillian Taylor-Mancusi, Trustee | B.A. | C.I.R.P said...

When one chooses to file a consumer proposal instead of an assignment in bankruptcy there is a presumption that the creditors will get more from the proposal then from the bankruptcy. (Otherwise they wouldn’t vote for the proposal.) Therefore we have to consider the value of the assets and therefore the likely distribution to the creditors in a bankruptcy. In this case the value of the shares of the incorporated company have to be considered.

There are provisions in the Bankruptcy and Insolvency Act for joint proposals but the liabilities have to be the same or substantially the same.

If the proposal is accepted by the creditors the assets do not vest in the trustee as they would in a bankruptcy. As such the business would not be directly affected by the proposal.

Without more detailed information we cannot provide answers beyond these generalities. You may wish to contact LCTaylor in Winnipeg and we would be able to deal more specifically with your situation when we get more details.